There are several steps you must take to create a nonprofit corporation. The first is filing a short document, usually called articles of incorporation, with the corporations division of your state government. To do this, you'll have to pay a filing fee of $30 to $125.
Your articles need to contain certain provisions in order to obtain tax-exempt status from the IRS. Check the IRS website for a list of what is required in your articles and for sample articles. In addition, you will need to check your state laws for any state specific requirements.
Generally, articles of incorporation contain the following permissions:
After you file your articles, you must apply for state and federal income tax exemption. The most common federal tax exemption comes from Section 501(c)(3) of the Internal Revenue Code. To obtain this exemption, you will need to complete and file a Form 1023 tax exemption application -- a fairly long and complicated form -- with the IRS. You must also write your corporate bylaws, a document that sets out the rules that govern your corporation, including procedures for making major business decisions, voting rights, and other important guidelines. Finally, before you start doing business, you must elect a board of directors and hold an initial meeting of the board. For more details, see How to Form a 501(c)(3) Nonprofit Corporation.